The mattress industry had fallen asleep on its laurels. But now there’s Casper, which has shaken it awake. Created in 2014, this New York-based startup has jolted the bedding industry into the age of e-commerce. The company’s mattress-es were originally ordered online and delivered by bike throughout the Big Apple in rolled and compressed form. Customers had a 100-night trial period within which they could return it free of charge if they were not satisfied. No store and no sales people, which meant that the company could slash prices and take over the New York market. An enormous success. Just one month after business began, Casper’s sales had already hit $1 million and after two years $100 million.
And the long-standing mattress makers felt the threat. In October 2018, the undisputed mattress leader in the United States, Mattress Firm, filed for bankruptcy. It recovered the following month, but at a huge sacrifice. Of its 3,000 stores owned, 660 were closed. Casper, which has since moved into other markets (including Canada, the United Kingdom, Germany, Switzerland and France), posted sales of $497 million in 2020.
But the company continues to operate at a loss, to the tune of $89.5 million last year. How did that happen? The market is terribly competitive. Casper’s initial, easily imitable strategy has been copied by a multitude of startups such as Leesa, Purple, Tuft & Needle and Yogabed in the United States, Eve Sleep and Simba in the United Kingdom, and Tediber in France. This steeper competition has forced Casper to spend massively on marketing (investing more than $650 million since its creation) and reinvent itself.
While the company originally sold only a limited number of products, it has expanded its product range to include lamps and accessories to improve sleep, and even pet mattresses. In parallel, Casper has opened brick-and-mortar stores – 70 so far – and signed partnerships with traditional vendors such as Mattress Warehouse in June 2021. Most analysts approve of this change in strategy and recommend buying the stock, which is trading at around $5 in August, half its IPO price of $12 in February 2020.